Economic Conditions

Investor Buyers Drive House Prices Upward

Home prices leaped up 12% in April compared to April, 2012, according to real estate analytics firm CoreLogic. USA Today has that story here: ("Home prices show strong gains in April," by Julie Schmit. "The states with the highest year over year home price appreciation were Nevada, up almost 25%; California, 19%; Arizona and Hawaii, 17%; and Oregon, almost 16%," the paper reports.

The April rise in the CoreLogic Home Price Index was "the biggest year-over-year gain since February 2006 and the 14th consecutive increase in home prices," according to CoreLogic release ("CoreLogic Home Price Index Report – April 2013"). "On a month-over-month basis, home prices increased by 3.2 percent in April compared to March data." But the report notes that house prices are still 22.4% lower than their peak level, set in April 2006.

Demand from individual home buyers isn't the only factor pushing prices up, the New York Times reports ("Behind the Rise in House Prices, Wall Street Buyers," by Nathaniel Popper. "Large investment firms have spent billions of dollars over the last year buying homes in some of the nation's most depressed markets. The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out. Some are already wondering if prices will slump anew if the big money stops flowing," the Times reports.